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Christmas in July: 5 Financial To-Dos to Make Your Holiday Season Merrier

It's hot. The laundry room is filled with towels from afternoons at the pool. My current goal is to see how many meals I can cook on the grill and not turn on the oven. And my days are filled with trying to stay in our air-conditioned home as much as possible and entertain children who are home from school. Honestly, the last thing on my mind is Christmas.

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But when I recently reviewed my budget for last year, I remembered spending January and February paying for my overspending at the holidays. And my strongest memories of the holiday season were honestly full of stress and trying to find websites that offered free last-minute shipping days before Dec. 25. So I decided to see if there was anything I could do while wearing flip flops and shorts to make this year less stressful from a financial perspective.

After talking with several experts, I came up with five items to add to my to-do list this July:

1. Pay Off Credit Card Debt from Christmas 2013

Luckily, I was able to pay off my credit card bills last year very quickly, but several friends of mine are still paying for the Xbox gaming system they bought their kids and their husband's new iPad. If you haven't paid off any debt you accumulated from last Christmas, then that should be your first priority.

"Don't take on any new debt. If you are still paying on credit card bills from last Christmas, don't allow yourself to shop for this year until you have paid for last year," said Gail Cunningham, National Foundation for Credit Counseling vice president for membership and public relations.

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Determine how much you owe on your credit cards and look through your budget to find places to cut back. You want to have enough time to save for this Christmas so you aren't paying for Christmas 2014 while buying fireworks next year.

2. Create a Budget for All Holiday Expenses, not Just Gifts

It may seem odd to grab lemonade and sit down in the air conditioning to make a budget for Christmas, but it is often easier to think rationally when you are not caught up in the holiday hype. Without a budget, you will more than likely overspend. While many people make a budget for presents, they often forget about all of the other expenses that come with the holidays.

Once you have determined a budget for Christmas, take the amount you need and divide it by five months. Each month, put that amount in a separate savings account and come Black Friday, you will have the cash you need to pay for the holidays. If you can't afford to put the amount you need aside each month, and then revise your holiday budget until you find a budget that will allow you to pay cash for your expenses this year. Another approach is to save $5 each day.

"Anyone can save $5 each day. If you put away $5 every day, it will come close to $1,000. While you cannot reduce your house and car payment, try to reduce other expenses, such as food, entertaining and utilities by $5 a day," says Cunningham.

4. Check Your Rewards Balances and Order Gift Cards

Look at all of the reward balances on your cards, especially those that you don't use often. Weston says that purchasing merchandise isn't usually the best value for rewards points. She says that if you have a small amount left on a card you don't use often, gift cards can be a good solution.

"Gift cards can be great for giving as holiday tips, especially for teachers who aren't supposed to take cash," Weston says. "This is a great time to go ahead and order the cards to beat the rush."

5. Consider Getting a New Rewards Credit Card

If you don't have enough rewards for an item on your list, especially holiday travel, considering signing up for a new rewards credit card with a hefty bonus for opening a card.

"This is a great, low impact way to accrue a large number of points which can be used for Christmas presents," says John Ulzheimer, president of consumer education for CreditSesame. "In fact, if you pick the right card right now there's really no reason you can't load up on enough points to funds the purchase of several gift cards without spending any more than you already spend."